Last week I wrote about total loss in Florida. It received such a good response that I wanted to share the wealth with other states around us. This week, I look to our neighbor to the north: Georgia.

A review of Georgia case law, statutes and regulations left me with a curious conclusion. It appears that Georgia has not definitively determined the definition of “total loss” for homeowner claims and has only limited guidance stemming from fire losses. While interesting to those who may live in Florida, it actually makes some sense because Georgia, while still susceptible, has not historically had to deal with devastation the likes of Hurricane Andrew or other disasters.

While the case law only contemplates total loss as it pertains to fire damage of a home, the discussion provides a standard that would likely lend itself, through analogy, to any type of covered loss to any type of building. Georgia code states,

Whenever any policy of insurance is issued to a natural person or persons insuring a specifically described one or two family residential building or structure located in this state against loss by fire and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss….1

One Georgia court, charged with interpreting the above code, held that,

evidence showing that it would cost more to repair the house than to replace it and photographs…showing that the house was substantially gutted by the fire was sufficient to authorize [a] finding that the house was “wholly destroyed by fire” as contemplated by the above statute.2

While the above gives some guidance, more recent case law has pointed out that Georgia courts have not stated a specific test to determine when a dwelling has been wholly destroyed.3 However,

Georgia courts [have held] that an issue of fact exists if there is some evidence that the home is wholly destroyed, photographs or testimony that the home is substantially gutted, or evidence showing it would cost more to repair the house than to replace it.4

Georgia courts have also stated that they do not support the notion from other states that there can be no total loss so long as a remnant of the structure is standing.5

Said another way, at least some evidence to suggest that the house or building is wholly destroyed is enough to get the case to a jury.

For those working on insurance claims prior to litigation, keep this in mind and remind insurance companies that so long as you can show that the house is “substantially gutted,” they better pay the policy limits or be ready to go to trial.

1 OCGA § 33-32-5(a).
2 Georgia Farm Bureau Mut. Ins. Co. v. Brown, 192 Ga. App. 504, 385 S.E. 2d 87, 90 (1986).
3 See Huckaby v. Travelers Property Cas. Co. of America, 2011 WL 6300569 (Ga. M.D. Dec. 16, 2011).
4 Id.
5 Id.